FRANKFURT Germany AP Europe's top central banker Tuesday called on Europeans to have faith in their future saying a lack of confidence was a major risk to the economy ahead of the Jan. 1 launch of the euro common currency. Wim Duisenberg president of the European Central Bank said sagging growth and a year of market volatility had already shaken corporate confidence in Europe. And his plea for support appeared to reflect analysts' concerns that the euro is being launched at a difficult time. Growth in Europe is falling. Coupled with the danger of falling prices or deflation the scenario could result in recession though that danger is far off. The European Central Bank will set monetary policy for the 11 euro nations as soon as the currency is launched. With some euro nations pushing for lower interest rates to help curb unemployment the bank may have a tough job ahead. Growth may achieve just 2.5 percent in in 1999 compared to earlier expectations of 3 percent Duisenberg said. And despite ``calmer conditions'' on world financial markets in November he called for caution saying the economy could still worsen. The central bank must ``be at the helm right from the beginning. There will be no mercy'' from financial markets worried about falling growth and the potential for deflation said Adolf Rosenstock economist at Nomura. The bank is being watched most keenly for how it will determine a common interest rate for the so-called ``euro zone.'' Duisenberg acknowledged that the interest rate discussion was ``intensifying and deepening and livening up'' but as widely expected did not reveal the rate. Many analysts expect it to be at or around Germany's 3.3 percent though some think the bank will set it at 3 percent to boost growth in Europe. Duisenberg also touched on the ECB's independence from politicians the most sensitive issue facing the bank and one that stems from the interest rate debate. Germany repeatedly has urged the bank to drop interest rates to boost economies and help governments cut unemployment standing Europe-wide at 9.9 percent. The ECB says its job is to keep prices steady and inflation low not to tinker with monetary policy to achieve broader economic goals. Pressure only grew Tuesday as leaders of Germany and France agreed to strengthen efforts to fight unemployment and boost the economy. While Duisenberg said the bank wanted governments to reform labor markets to increase employment and boost growth he said it was prepared to cooperate in other ways. He did not give specifics. ``Without prejudice to price stability our policy should and will contribute to the other economic goals'' he said. Duisenberg chided governments for not doing enough to produce budget surpluses and reduce debt levels which he said ``are still at a very high level.'' ``These are risks endangering the credibility of the euro and the objective of price stability'' in the future euro area Duisenberg said. With the Jan. 1 euro launch imminent analysts have said the ECB is under increasing pressure to spell out its policies. Duisenberg who spoke after a meeting of the ECB's governing council announced the bank would aim to keep money supply growth in the economy at 4.5 percent roughly meeting expectations. The bank's governing council consists of 11 central bank chiefs from the countries launching the euro plus a Frankfurt-based directorate of six. Tuesday was the council's next to last scheduled meeting before the currency launch. dkt-aet APW19981201.1204.txt.body.html APW19981201.1327.txt.body.html